I think there are two different types of regard a guild can earn:

1) the general opinion you form when you see an unknown player with the guild's tag

2) the ongoing evaluation of how that guild would suit you if you needed a new guild

I think for #1 it gets experessed pretty publicly on forums and sometimes in general or trade chat if a guild has high name recognition. #2 is more based on observations and includes evaluation of things like PVE progress, officer hierarchy, regimentation, guild charter, raid schedule etc.

It's possible for a guild to have very bad public relations and also be attractive to people who join a guild as a means to an end.

I think that's probably correct, but one leads to another. Disrupted managed to have a couple of interesting disputes fairly early in their history (Innervate, you stole our MT with Thunderfury, etc.), as well as a few people who left because of guild chat and vent, etc. They had an application drought for quite a while.

Then people started playing with some of their players, and realized that a lot of the WoW forums bullshit was pure hype. We started to get in apps from other fairly-geared guilds. We started to be a guild that people wanted to join, and they stayed and joined in on a lot of the joking vent/guild chat that had proven to be so egregious to a few of the early members.

Because of the opinions they formed when they saw an unknown player with the tag, they wanted to join, though, perhaps our success at raiding helped. Because some other guilds on Gilneas, though they had respected players, just couldn't pull ahead, and, as such, couldn't get the same quality members.

Getting mass perma-banned does an okay job too.

edit; I personally always enjoyed the server-forum (or R&D) trash talk aspect of WoW, griefing, exploiting, and just generally enjoying yourself at other's expense was always a lot of fun. Though I thought constantly cock-blocking world bosses for months on end was bad, but I've heard some pretty crazy stories (guild websites getting hacked, etc.).

From my own perspective, reputation is essential for long-term success. When I started DoD on Deathwing, it was only with a handful of my friends in real life. I had never played an MMO before and had barely enough experience managing a checkbook, let alone a 400-member guild of players, all of varying attitudes. I knew I was going to need help, and sought many out as my guild grew, but one thing was clear at the beginning: I was going to treat others with respect on our server, and went doubly-true for my guild members. Even if other guilds ended up being the "bad-guy" ones, we were not there to judge or cause grief. I can recall several incidents early in my guild's career where guild members tried to teach other guilds' members a "lesson in behavior management", which I had zero tolerance for.

As we grew to the point where it came time to start thinking about raiding, there were handfuls of Horde guilds on my server, all in the same boat: Too small to raid, needed to merge to start taking the 40-man stuff on. At that point, we began taking interviews from various other smaller guilds that were considering us for a merge-into partner. Honestly, at that point, they had nothing else to go on...except the reputation we had built on our server...and my word (which could have meant squat at that point).

It paid off. The good reputation we had was a solid ace-in-the-hole, and I was able to make a number of guild acquisitions of similar-minded people, which pushed us over the edge into raid mode. Shit-talking often ensued publicly as we continued to merge with guilds, inevitably labelled a zerg guild, but I mostly ignored it and encouraged the guild to continue pushing their PvE progress.

These days, our server's Horde population has dwindled, and many guilds have broken up, moved to other servers, or quit playing. Yet, we continue, and the door is always open for new, mature, respectable players; we get new applications daily. If I had gone the alternate route, and decided that reptuation means nothing, and that we burn as many bridges as we feel like...there is no way in hell my guild would be around today. I would have sufferred mass attrition during those days of guild absorption, and the most-progressed PvE guilds would have got my boys (and girls).